J&J to acquire ADC drug developer AmbrxAmbrx for $2B

08 Jan 2024
www.biopharmadive.com
ADCAcquisitionLicense out/in
Johnson & Johnson will pay $2 billion to acquire Ambrx Biopharma and the San Diego biotechnology company’s pipeline of targeted drugs for cancer.
The deal’s announcement Monday coincides with the start of the annual J.P. Morgan Healthcare Conference, which is typically viewed as a jumping-off point for industry dealmaking in the new year. Also on Monday, Merck & Co. said it has agreed to purchase the cancer drug developer Harpoon Therapeutics, and Novartis reached a deal to buy the privately held Calypso Biotech.
All told, the three transactions represent nearly $3 billion in total upfront value — similar to what was announced at the beginning of last year’s J.P. Morgan meeting.
In buying Ambrx, J&J is stocking up on a kind of drug that’s newly in vogue among large pharmaceutical companies. AmbrxAmbrx specializes in antibody-drug conjugates, which pair a targeting antibody with a cell-killing toxin. In theory, their design can minimize treatment side effects while delivering a potent punch to tumors.
Last year, ADCs were at the center of the largest pharma deals, including Pfizer’s $43 billion acquisition of Seagen, an early pioneer in the field, and Merck’s licensing of three experimental ADCs from Daiichi Sankyo. More recently, AbbVie paid $10.1 billion for ADC maker Immunogen.
A steady drumbeat of licensing agreements accompanied those big-ticket deals, too. In a report put out Friday, J.P. Morgan analysts found that total upfront cash and equity for ADC licenses reached $4.6 billion last year, an all-time high.
AmbrxAmbrx’s most advanced drug candidate targets a protein known as HER2 for the treatment of breast cancer. The company also has ADCs targeting PSMA for prostate cancer and CD70 for kidney cancer.
J&J appears most interested in Amrbx’s ADC for prostate cancer, dubbed ARX517. The pharma currently markets several drugs for prostate cancer and has made the disease a priority area of research.
“The results seen to date with ARX517 in [metastatic castration-resistant prostate cancer] are promising and represent a potential first- and best-in-class targeted therapy for the treatment of this aggressive disease,” said Yusri Elsayed, J&J’s therapeutic area head for oncology, in a statement from the company.
J&J will pay $28 per Ambrx share, a more than 100% premium to the stock’s closing price Friday. The deal price represents a dramatic reversal from just two years ago, when Ambrx shares traded below $1. Shares began to climb in late February and early March, when Ambrx disclosed early clinical trial data for its prostate and breast cancer therapies.
Spun out of The Scripps Research Institute in 2003, Ambrx has developed a specialized technique for conjugating antibodies to the chemical linkers needed to pair the targeting proteins with toxins.
The companies expect the deal, which is worth an estimated $1.9 billion net of Ambrx’s cash on hand, to close in the first half of 2024.
Outside of the Amrbx deal, &J currently has ADC partnerships in place with Mersana Therapeutics and Hangzhou DAC Biotechnology.
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